Since the beginning of the year we have had a number of enquiries about the AERO stock market in Romania. These enquiries have come from companies who wanted to know about trading as well as those who were considering going to the market either for a capital raising or a future IPO.
AERO came into being because it was felt that the former RASDAQ market was not working properly and that a new type of securities market needed to be created in Romania. It was then decided to close the RASDAQ and for the companies listed on the RASDAQ to decide if they wanted to transfer to the new AERO market or to decide if they no longer wish to be traded on a recognised market organized by the Bucharest Stock Exchange.
To transfer from the RASDAQ market the RASDAQ companies had to call a general meeting of shareholders and pass a resolution confirming that they wished the shares of the company to transfer to and be listed on the AERO market. If a company did not call the relevant meeting and did not pass the resolution then the company became “delisted” and its shares were no longer traded on a BVB regulated market. They could of course transfer to the Sibiu exchange.
To date a number of companies have passed the necessary resolutions to move to the AERO market and have done so. It is also true to say that many companies have either neglected or failed to pass the relevant resolutions and therefore their shares are now delisted from the RASDAQ market. There were a number of reasons for not applying to transfer to the AERO market. The number of shares available for trade were small; there had not been any trading in the shares for some time and it was therefore felt that the need to be on a listed market was not of major importance or the majority of the shares were held by one or more investors and therefore there was no need to protect the minority investors. There was also the question of the related cost.
However, some companies did pass the necessary resolutions and the AERO market has been able to go live with a number of companies already listed.
This has meant that there was already a trading history in the market and opens the AERO market to other companies. This has allowed new comp[anise to be listed on the AERO market and more are planned for the weeks ahead.
The avowed intention of the AERO market is to be a junior market both for listing and raising new capital. An active stock markets primary role is to raise new capital for companies as well as providing a platform to list shares in the future. A number of new companies are preparing themselves to raise capital on the AERO market in addition to some who are already preparing an IPO. So there is an active pipeline. The shares listed to date also appear to be actively traded and therefore there is a demand in the market for active investors.
Interestingly the new market appears to favour hi tech and other new service companies in the new industries rather than the traditional types of companies. The AERO Market is also perhaps not the market at the present time to raise monies for natural resource and energy companies that require high capital costs. The AERO Exchange is quick to point out it is the sponsoring brokers and institutions who will decide what types of companies who come to the market. The Exchange’s position is only to ensure that the listing requirements are properly fulfilled. The market will determine the types of companies and the amounts raised. It is a fact that the amounts of monies being raised at the present time are relatively small, in the hundreds of thousands of Euros but over a period of time it is hoped larger sums of money will be raised.
We are of the opinion and are advsing clients accordingly that if a company needs new monies then it should certainly consider and look at the AERO market and analyse whether this is a source from where they can raise money to finance the development and expansion of their company.
